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Money managers under the microscope

Managing for the future

March 3, 2009

One thing that the credit crisis has demonstrated is that even performing well isn’t always enough to stop investors in need of cash from taking their money out of a hedge fund.

rtr5afThe industry had its worst year on record last year, losing nearly 20 percent in performance terms, but not everyone lost money.

Managed futures, which bet on trends in futures markets, was the top-performing strategy with a gain of 18.33 percent, according to Credit Suisse/Tremont, helped by the big trends (mostly downwards) in a whole variety of markets last year.

Plenty of funds of hedge fund managers think 2009 will see similar trends and think this strategy could do well.

So money is pouring into managed futures?

Well, not quite. According to a Lipper Tass report, managed futures, which tends to offer good liquidity terms to investors, saw the second-biggest outflow of any strategy in the fourth quarter of 2008 at $23.95 billion.

It seems that for some investors, the focus is so much on the short-term future that king cash wins out even when positive returns are on the table.

(Lipper is a Thomson Reuters company).

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